US Senate Approves the USMCA

The United States, Mexico, Canada trade deal (aka. NAFTA 2.0), has finally been approved by the US Senate after 29 months of extensive negotiations. Republicans and Democrats came together to show support with 89 votes in favor of the new agreement. Just 10 were against it. While this agreement is not final, President Trump announced that he will sign the agreement next week. Once signed, the revised USMCA will be turned over to the Canadian Parliament for ratification, however, they are on winter break until January 27.

Here’s a quick refresher of some of the main changes for this new USMCA to evaluate the potential impacts on your business:

Automotive Industry

Changes related to rules of origin; specifically increasing the North American content

Over time, light vehicles will change the requirement from 62.5% – 75% of North American parts

Changes to the parts content, now split into core, principal and complementary parts requiring 75%, 65% and 60%, respectively

40% of automobiles and 45% of light trucks to be produced with an average labor wage of $16/ hr.

General

Strong labor controls for Mexico, with a greater ability for workers to unionize

Enhanced protections for intellectual property

Pharmaceutical patents now valid for a 10-year term

Copyright valid 70 years after the author´s death

The terms of the USMCA will remain in effect for 16 years (sunset provision) after which time the parties can renegotiate terms. However, after 6 years the terms of the sunset provision can be revisited.